Correlation Between Cloud Air and GiantStep
Can any of the company-specific risk be diversified away by investing in both Cloud Air and GiantStep at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cloud Air and GiantStep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and GiantStep Co, you can compare the effects of market volatilities on Cloud Air and GiantStep and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cloud Air with a short position of GiantStep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and GiantStep.
Diversification Opportunities for Cloud Air and GiantStep
Weak diversification
The 3 months correlation between Cloud and GiantStep is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep and Cloud Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cloud Air CoLtd are associated (or correlated) with GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of Cloud Air i.e., Cloud Air and GiantStep go up and down completely randomly.
Pair Corralation between Cloud Air and GiantStep
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 0.45 times more return on investment than GiantStep. However, Cloud Air CoLtd is 2.24 times less risky than GiantStep. It trades about -0.02 of its potential returns per unit of risk. GiantStep Co is currently generating about -0.04 per unit of risk. If you would invest 95,400 in Cloud Air CoLtd on September 12, 2024 and sell it today you would lose (16,000) from holding Cloud Air CoLtd or give up 16.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. GiantStep Co
Performance |
| Timeline |
| Cloud Air CoLtd |
| GiantStep |
Cloud Air and GiantStep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and GiantStep
The main advantage of trading using opposite Cloud Air and GiantStep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, GiantStep can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GiantStep will offset losses from the drop in GiantStep's long position.| Cloud Air vs. SK Hynix | Cloud Air vs. People Technology | Cloud Air vs. Hana Materials | Cloud Air vs. SIMMTECH Co |
| GiantStep vs. Haitai Confectionery Foods | GiantStep vs. Cloud Air CoLtd | GiantStep vs. FoodNamoo | GiantStep vs. Sempio Foods Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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